Explainer: What is President Obama’s Budget?

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What is the President’s budget?

Technically, it’s only a budget request—a proposal telling Congress how much money the President believes should be spent on the various Cabinet-level federal functions, like agriculture, defense, education, etc.

Why does the President submit a budget to Congress?

The Congressional Budget Act of 1974 requires that the President of the United States submit to Congress, on or before the first Monday in February of each year, a detailed budget request for the coming federal fiscal year, which begins on October 1.

If it’s due the first Monday in February, why are we just now hearing about it?

President Obama turned in his budget late—again. This will be Obama’s fifth late budget submission in five years, making him the first President to present three consecutive late budgets. According to the House Budget Committee, “All presidents from Harding to Reagan’s first term met the statutory budget submission deadline in every year.” Reagan and Clinton both missed their deadlines once in eight years.

What is the function of the President’s budget request?

The President’s annual budget request serves three functions:
• Tells Congress how much money the President thinks the Federal government should spend on public needs and programs;

• Tells Congress how much money the President thinks the government should take in through taxes and other sources of revenue; and

• Tells Congress how large a deficit or surplus would result from the President’s proposal.

What spending does the President have to request in his budget?

The budget request includes all optional or “discretionary” Federal programs and projects that must have their spending renewed or “reauthorized” by Congress every fiscal year. For example, most defense programs are discretionary, as are programs like NASA, Small Business Administration (SBA) loans, and housing assistance grants. The president’s budget request recommends funding levels for each discretionary program, which totals only about one-third of federal expenditures.

What’s not included in the budget?

Mainly, “entitlement” programs established by Congress, like Social Security and Medicare. Since those programs include mandatory spending, the President does not have to request they be funded for the coming year, though his budget request can recommend new benefits or changes in the level of spending for specific entitlement programs. Entitlement programs comprise about two-thirds of Federal spending.

What happens when Congress receives the President’s budget request?

The House and Senate Budget Committees will hold hearings on the president’s budget request. In the hearings, administration officials are called to testify about and justify their specific budget requests. From these hearings the Budget Committees will prepare a draft of the congressional budget resolution.

The Congressional Budget Act requires passage of an annual “Congressional Budget Resolution”, a concurrent resolution passed in identical form by both House and Senate, but not requiring the President’s signature. The Budget Resolution provides Congress an opportunity to propose its own spending, revenue, borrowing, and economic goals for the coming fiscal year, as well as the next five fiscal years.

Did the President offer a “balanced budget?”

No. President Obama has rejected calls to balance the federal budget in the next ten years and instead argued that his primary economic concern was not balancing the budget, but rather growing the economy. “My goal is not to chase a balanced budget just for the sake of balance. My goal is how do we grow the economy, put people back to work, and if we do that we are going to be bringing in more revenue,” he said.

Will Congress pass the President’s budget request in its current form?

Definitely not. In fact, the last time Congress passed a budget was in 1997. Congress passed the closest thing to a budget, an omnibus spending bill, in 2009 and 2011. In the absence of a budget deal Congress and the President must enact a number of “stop gap” measures (supplemental appropriations bills or emergency supplemental appropriations bills).

If Congress isn’t going to pass a budget, why does anyone care about the President’s budget request?

The actual process may be nothing more than legally mandated political theater but the details of the President’s budget request reveal the priorities of his administration.

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Joe Carter
Joe Carter is a Senior Editor at the Acton Institute. Joe also serves as an editor at the The Gospel Coalition, a communications specialist for the Ethics and Religious Liberty Commission of the Southern Baptist Convention, and as an adjunct professor of journalism at Patrick Henry College. He is the editor of the NIV Lifehacks Bible and co-author of How to Argue like Jesus: Learning Persuasion from History's Greatest Communicator (Crossway).